Effect of Corporate Governance on the Financial Performance of Listed Consumer Goods Firms in Nigeria

The study investigated corporate governance's effect on consumer goods firms' financial performance from 2012 to 2021, using a panel data regression model to analyse data. The study used leverage and company size as control variables and the board composition index, audit committee index a...

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Veröffentlicht in:African journal of business and economic research 2023-12, Vol.18 (4), p.143-163
Hauptverfasser: Elumaro, Adekunle, Abbas Ibrahim, Umar
Format: Artikel
Sprache:eng
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Zusammenfassung:The study investigated corporate governance's effect on consumer goods firms' financial performance from 2012 to 2021, using a panel data regression model to analyse data. The study used leverage and company size as control variables and the board composition index, audit committee index and transparency and disclosure index as proxies for corporate governance. ROA, ROE and Tobin’s Q measure financial performance. Corporate governance has significant positive (board composition on ROE, ROA and Tobin’s Q and audit committee on ROE and Tobin’s Q) and adverse (Transparency and disclosure on ROA) effects on financial performance. Leverage and company size significantly impacted listed consumer goods firms' financial performance (ROA and ROE). Leverage negatively affected financial performance measured by ROA, ROE, and Tobin’s Q. In contrast, the effect of company size is significantly positive on Tobin’s Q. The study recommended that shareholders and directors should ensure that their representatives on the audit committee carry out their duties effectively and that board composition complies with the corporate governance code while annual reports are transparent with full disclosure of required information.
ISSN:1750-4554
1750-4562
DOI:10.31920/1750-4562/2023/v18n4a7